Profiteers Are Already Lining Up At Trough

September 22, 2001|By Marie Cocco Newsday

The train is about to steam out of the station. The clearest signal is the crush of corporate lobbyists elbowing to get aboard.

Since last week's assaults on the United States, division and disdain have been replaced in Washington by instant comity and agreement to act: to strike back at the terrorists; to invigorate the exhausted economy.

The notion of a "lockbox" to protect the Social Security trust fund from politicians who would otherwise spend the retirement money has become as much an archaeological artifact as the Saturday Night Live skits that ridicule it. The money now is a giant reserve to be tapped for a national emergency.

No one argues against the necessity; there is universal relief that the money is there. It is needed to retaliate, and to recover.

We are at war, the president says. Like all wars, this one has come with profiteers.

The flames had not cooled at the World Trade Center and the Pentagon when House Republican leaders began circulating a shopping list of tax breaks for wealthy investors and business. It is to be dressed up as a "stimulus" package for the moribund economy, paid for from the payroll taxes every American worker kicks in every week.

This is not, mind you, the same catalog of emergency measures that must be taken to rebuild New York and the Pentagon, or to keep the staggered airline industry aloft, or to mount a sustained military and law-enforcement campaign against terrorism. There is no question these are needed now and into the future. For these we are happy to pay.

The profiteers' list is altogether different.

The tax breaks for corporations and investors that lobbyists and their friends on Capitol Hill promote bear a remarkable resemblance to tax breaks from the Reagan era -- some were even enacted then and later repealed. It's the same list that was pushed on the Bush presidential campaign and, thankfully, rejected. It is the same one congressional Republicans promoted a year ago, and two years, and four. The same one that lobbyists hoped would mark the "second phase" of the Bush tax cut -- payback to business for having supported the first.

The most profoundly silly of the ideas is a cut in capital gains taxes, promoted as a way to spur new investment. In fact, no study has shown this connection. But there are plenty that demonstrate that the benefits of such a cut go to the wealthiest 2 percent of Americans, who hold most of the assets to which the tax applies.

The people who do the arithmetic for Congress on tax policy always count capital gains tax cuts as raising revenue in the short term, as people quickly sell off assets.

Perhaps there is someone on Wall Street who has looked at the ticker this week and concluded that what the market needs is more sellers. Such a prescription would likely find its promoter stoned with the smoldering rubble. In Congress, though, they push the idea without fearing punishment.

There are other investment breaks being bandied about, for faster and more generous write-offs for new equipment and plants -- no matter if the plant is to be built in Laredo, Texas, and not lower Manhattan.

"Clearly the landscape has changed, and it's changed rapidly," said one lobbyist for an influential business group. "People did not expect there would be talk of a business tax bill."

So the bar is open. And they unashamedly belly up.

The White House has, so far, shown admirable public resolve in refusing to endorse anything but relief for the neediest cases. The airlines will get theirs; the regions that need rebuilding will, too. In private, though, an administration team is considering a smorgasbord of tax cuts, most on the lobbyists' lists.

President George W. Bush has discovered of late the importance of cooperation with the rest of the world. Now is just as good a time for him to learn that a tax cut is not the economic solution for all seasons. The spending anticipated for repairing the damage, to put the United States on a war footing, to bolster airport security in the long term and do the same for intelligence comes to at least $100 billion, and counting.

This is economic stimulus that is grounded in public purpose, not rank opportunism.